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Prosperity Through Higher Costs

Here’s another letter to the Washington Post on Prof. Massengill’s piece on Wal-Mart:

Rebekah Peeples Massengill argues that low-income families are harmed by Wal-Mart’s “relentless cost-cutting” (“Five myths about Wal-Mart,” July 12).  But because retailers from the earliest times have competed for customers by cutting costs (a result of what Prof. Massengill calls “prioritizing consumption”), her complaint isn’t with Wal-Mart so much as it is with retailing itself.  Therefore, the only real solution to this scourge of ever-less-costly access to consumer goods is a strict prohibition on retailing.

Only by outlawing retailing can we ensure that no retailer will ever again weaken the economy by cutting costs.  Only by outlawing retailing can we finally maximize the amount of resources used to bring consumer goods from farms and factories to individual homes.  (Think of the countless hours that every one of us will spend driving from farm to farm and from factory to factory to buy food, clothing, and other consumer goods!)  With retailing outlawed, the costs that we’ll incur – that is, the amount of resources that households will be obliged to spend – to bring each consumer good from farm or factory into a home will be multiple times greater than the puny amount of resources spent today to make each consumer good accessible for purchase.

And when the Commerce Dep’t. calculates the enormous monetary value of the resources that households spend to acquire consumer goods in this retailer-less world, we’ll discover just how prosperous we are without the likes of Wal-Mart and other greedy cost-cutting corporations.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030